Business Brief (Aug. 26): Chinese Stocks Surge, Yuan Appreciates

The past 24 hours have been notable for a series of significant business and economic developments in China and globally. Chinese stock markets experienced a major rally, with the three major mainland Chinese indexes surging and the total market turnover exceeding 3 trillion yuan ($413.5 billion), driven largely by gains in the property sector. This followed new stimulus measures announced in Shanghai, which led to a 9.15% rise in Vanke shares despite ongoing pressures. The rally supported the yuan, which appreciated to about 7.15 against the U.S. dollar, buoyed by both external monetary policy factors and increased foreign capital inflows. Meanwhile, Evergrande was formally delisted, marking an end to its stock market presence. Institutions observed a revival of foreign investment in Chinese markets during this period [para. 2].

Shanghai introduced significant new property stimulus policies, following similar moves by Beijing. The measures include lifting purchase limits for some buyers in noncore areas, redefining how individuals are treated for purchase purposes, removing the difference in mortgage rates between first and second homes, and revising property tax policies. While Guangzhou has fully eliminated purchase restrictions, Beijing, Shanghai, and Shenzhen have relaxed them only in suburban areas and preserved limits in core urban districts [para. 3].

China has also revealed plans for a major expansion of its national carbon market. A new governmental document sets forth ambitions to accelerate the low-carbon transition by expanding carbon emissions trading, aiming to cover all major industrial emitting sectors by 2027. By 2030, a cap-and-trade national market, with both free and paid emission allowances, is expected to be well established [para. 4].

The National Development and Reform Commission (NDRC), led by Chairman Zheng Shanjie, hosted a symposium to gather suggestions for the 15th Five-Year Plan, focusing on expanding domestic demand, increasing employment, supporting company innovation, and promoting a fair market environment [para. 5].

Chinese authorities are poised to issue licenses for satellite internet services, marking the first commercial step for this industry in China. However, experts suggest it will take another two to three years before these services are on par with those of Starlink [para. 6].

Monetary policy also saw a boost, as the People’s Bank of China conducted a 600 billion yuan medium-term lending operation, marking the sixth consecutive month of such action and resulting in a 300 billion yuan net injection for August. Following a 1 trillion yuan reserve requirement ratio cut in May, these measures have increased net liquidity, especially in August [para. 7].

In the tech sector, Huawei is preparing to launch a new AI-specific solid-state drive (SSD) designed for high-capacity and high-performance needs in AI training and model deployment, with the unveiling event set for August 27 [para. 8].

A summary of additional headlines notes that Hong Kong stocks reached a near four-year high, HSBC Research raised its Shanghai Composite index target to 4,000, Cambricon stock soared due to demand for domestic AI chips, and companies including Nvidia, PDD, BYD, and CMOC made advances. Internationally, the Trump administration signaled the possibility of a 50% tariff on India, other countries halted parcel shipments to the U.S., and a 15% tariff on EU-originator drugs was announced [para. 9][para. 10][para. 11][para. 12][para. 13][para. 14][para. 15][para. 16][para. 17][para. 18][para. 19][para. 20][para. 21][para. 22][para. 23].